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Lucy Nation on the building blocks needed to develop Australia's hydrogen industry

21 June 2023

Lucy has worked for bp since 1998 in Australia, the US, UK, Europe and Singapore. In January 2021 Lucy was appointed to the position of vice president of regions, cities and solutions, Asia Pacific – a division of bp focused on providing integrated and decarbonized energy solutions to corporations, cities, regions and bp’s own businesses in support of bp’s net zero commitments. This speech was delivered at the Australian Energy Week Conference in Melbourne.

Good afternoon, everyone.


I’d like to start by paying my respects to the traditional owners of the land we meet on today - the Wurundjeri people of the Kulin nation and acknowledge their continued connection to country. I would also like to acknowledge all Aboriginal and Torres Strait Islander people present here today. 


As we head towards a referendum later this year to progress the Uluru Statement from the Heart, let me affirm bp Australia’s support for constitutional recognition of Aboriginal and Torres Strait Islander peoples. Enshrining an Indigenous Voice to Parliament moves us further down the path of reconciliation and a step towards a more equitable Australia.


I’m Lucy Nation and I lead bp’s hydrogen business in Australia and Asia Pacific. 


It’s wonderful to be here with you for Australian Energy Week this afternoon and to hear the collective commitment to solve one of the great challenges of our time - the delivery of secure, affordable and sustainable energy, today and into the future.


This afternoon, I want to speak about what we need to be doing - right now - to lay the foundations for an Australian hydrogen industry that can sustain and enrich the country – as other energy industries have in the past.


The fact is that Australia is at the precipice of a profound opportunity to seed the next major energy industry that will underpin a low carbon economy. And crucially, Australia has all of the ingredients to take advantage of that opportunity; 


  • Abundant natural resources; vast lands, sun-drenched during the day with significant winds at night, providing prime locations to produce renewable power at a competitive price,
  • An endowment of critical minerals and resources,
  • A skilled workforce with excellent R&D capabilities,
  • A stable society with strong institutions and the rule of law; and
  • Strong trade relationships with many nations around the world.

Australia has a long and successful history of exporting energy. It has underpinned our prosperity and sustained a legacy of industry and innovation. As bp’s CEO has said – ‘On the doorstep of Asia - Australia has the best postcode!’

At bp, we’re excited by the potential in Australia to be a major green energy producer and, a green energy exporter. We believe that there is an opportunity to not only produce domestic energy at globally competitive costs, but to allow Australia to become an advantaged manufacturing location due to local green energy pricing competitiveness.  By combining the renewable energy and resources that we have in abundance here, we can expand the breadth of high value, low carbon products available for export and have tangible impacts on decarbonisation both domestically and globally.  

Australia is a critical market for bp, which is why we are matching the immense opportunity here with our own ambitious plans to help new and existing customers to decarbonise. Our investment plans in hydrogen recognise domestic needs, as well as major international demand in Asia and Europe. But, alongside our Australian hydrogen plans sit significant investment in EV charging, bioenergy, renewable power production, and continued investment in offshore gas in Western Australia. We believe, as others have highlighted at this conference, gas will continue to play a key role in the energy transition. At bp, we’re focused on reducing the emissions associated with its production and use while developing low carbon energy alternatives at pace. 


As the energy transition hastens, we must ensure we’re making the right investments in the energy industries of the future. This is important for a number of reasons:

  • We need to invest in projects that will tilt the balance in favour of achieving emission reduction goals - both here and abroad,
  • We must manage our domestic energy needs for decades to come, ensuring we sustain secure and affordable energy supply,
  • We need to continue attracting foreign investment that will enable us, and has always enabled us, to create globally-scaled projects, 
  • We must develop the skilled workforce to build, operate and maintain these projects; and
  • Fundamentally we need to get clean energy to be more cost effective than fossil energy to allow an economic energy transition.

We agree that in most cases, electrification is the most efficient way to decarbonise. However for the many decarbonisation challenges where electrification is not going to work, hydrogen and its derivatives will play an important role – be it as a feedstock for industrial or chemical processes, a method for storing and transporting energy, or helping to lower carbon emissions for heavy haul trucks that must travel long distances.


 bp is progressing three world-scale green hydrogen projects in Western Australia where we have access to abundant renewable resources in close proximity to sources of demand:

  • Firstly - the Australian Renewable Energy Hub, or AREH. Currently the world’s largest renewables project, this is a joint venture with Macquarie Capital, CWP Global and Intercontinental Energy. bp is the Operator and lead marketer for the project and we are working closely with both our JV partners and the Traditional Owners and custodians of the land, the Nyangumarta People. AREH is a very exciting project that will bring advantaged solar and wind resource at huge scale to help decarbonise mining activities in the Pilbara, provide advantaged green power and hydrogen to new minerals processing facilities and export green energy at scale to Asia and Europe. At 26 GW it is on track to produce more power than the largest power plant in the world.
  • Secondly – Project GERI. Located in the Mid-West near the WA-Government supported Oakajee Strategic Industrial Area. Using unrivalled wind and solar resources with more than 10 GW of renewable generation, GERI will play an important role in suppling green power and hydrogen for today’s industry, whilst also powering the region’s future processing of critical minerals and exporting green energy. 
  • And thirdly - H2Kwinana, south of Perth. Kwinana is an example of our vision of an integrated energy hub and one which makes good use of former refinery infrastructure as we repurpose equipment, tanks, transmission lines, jetties, pipelines and utilise a wastewater treatment plant to efficiently and quickly bring online multiple green energy solutions that are symbiotic. We will re-use the refinery hydrotreaters as the starting point of our planned Kwinana Renewables Fuels plant. Currently in FEED and pending a final investment decision later this year, the Renewable Fuels plant will be Australia’s largest bio-refinery producing more than 10,000 bpd of sustainable aviation fuel and renewable diesel. Renewable fuels processing requires decarbonised hydrogen and so we will start with a 100 MW electrolyser co-located to supply both the bio-refinery and local industry. A proud and grateful recipient of the federal government’s hydrogen hub funding, we are aiming to have the first 100 MW up and running by 2026 and then scale to 2 GW of production to support export opportunities.  

Initially, the plan for each project is to focus on supplying renewable power and hydrogen to local markets contributing to decarbonising Australia, before scaling up and exporting to international markets and continuing to be a supplier of choice for important global partners. It’s a strategy bp is applying around the world for our hydrogen projects; starting with a focus on local supply, then regional and global. The capacity to meet domestic energy needs, coupled with the international reach to service major trade partners, is an important element that bp brings to the table. 

To make the Hydrogen industry a success, we’re going to need large scale, cost competitive projects. Doing so means we can’t afford to treat it as a niche industry, it must become part of the broader energy system.

But let’s acknowledge what we’re all thinking – the road ahead certainly isn’t for the faint hearted.

Consider where we are, compared to gas – or more specifically, LNG. LNG is a product the world needs – it is clear who the customers are to purchase it, and on what terms, due to clear pricing indices. It is clear how they will ship it and what import locations and distribution infrastructure will be used.  

It has mature supply chains to construct, operate and maintain facilities. It has established infrastructure to produce, liquify, ship and re-gasify.

But as with any nascent market – hydrogen is yet to attain all of these key attributes and faces many “chicken and egg” problems. 


To name a few of the challenges we face today:

  •  Some buyers may not yet be clear on what form they want green energy in, however we need to push ahead and make decisions on the design of our projects to avoid delays,
  • Buyers need green pricing now to make strategic decisions, well before the projects have taken FID and the project economics can be clear, 
  • Undeveloped supply chains make estimating precise project economics difficult,
  • There is a lack of scaled infrastructure,
  • An undeveloped workforce; and
  • An emerging regulatory environment.

We can’t treat hydrogen projects like business as usual. They will require their sponsors to make incredibly big and bold decisions today. The challenges to simply finance these projects are very different to what we are used to when compared with projects for established forms of energy, like LNG. It’s certainly not business as usual. But we also have clear memories of the early days of the LNG industry which faced many of the key challenges that the nascent hydrogen industry does today. We have seen this before. 

bp and Australia are not alone in facing this task. Governments and companies across the globe are all grappling with the issue of how to align supply and demand and how to keep the energy transition moving forward at pace. 


For all of us, on Team Australia, if we want to stay in the green energy race it is a challenge we must lean into. 

The world is inching closer to the precipice, as we near the Paris target to keep temperature rises to 1.5 degrees.

In Australia, we have seven short years to achieve our 43 percent emission reduction target, and consultation has commenced for the next tranche of emission reduction targets.

So this is not just an opportunity – it’s a necessity.

And staying in the race is about more than decarbonisation. It’s about maintaining our role as a reliable and successful energy provider in Australia and the region. 

Given Australia’s economic and industrial profile, we need to be in the first wave of green hydrogen project developments to ensure we benefit from the tide of global capital, give confidence to our customers, and establish ourselves in the first tranche of 15 to 20 year overseas offtake deals.

If we give this role up – it will be very difficult to recoup while playing catchup.

Many different participants have a role to play:

  • Federal government to set policy, facilitate project-based trade links, and create best-practice approval frameworks for regulators,
  • State and local governments to prioritise access to land, develop enabling infrastructure, reform power markets and contribute to important demand-side initiatives,
  • Educators to engage with businesses to understand the future workforce skills – and put in place curriculum today for talent tomorrow; and
  • … and the private sector to engage openly, with a clear view of how shared investment and commitment is meeting Australia’s decarbonisation and diversification strategies.

We can get there using the established processes we are all familiar with – but as I’ve mentioned, this isn’t business as usual. While the clock is ticking, what’s needed is a coordinated effort – with all participants actively collaborating.

It’s a role we’re comfortable with. We’ve a track record working with governments and partners to service the needs of our customers across the globe.

Fortunately, there are green shoots of us working together to create Australia’s hydrogen industry. It’s no longer a question of ‘if’ – but rather ‘how’ and ‘when’? 

Let me applaud just a couple of examples of recent steps:


  • The decision to refresh the National Hydrogen Strategy. It provides an opportunity to assess what has changed over the last four years.
  • The Government’s $2 billion Hydrogen Headstart program. This has been hugely helpful.It’s sent a strong message of commitment to our potential customers who have been looking at what governments in the US, India and the Middle East have been doing while also sending a strong message of confidence to those assessing global investment opportunities. 
  • Government to Government agreements with key partners.Such as HyGATE with Germany. Such agreements show the regard our trading partners have for Australia’s reputation as a reliable exporter of energy.

Each of these signals provide confidence to energy companies and investment partners that there is genuine commitment to get the policy settings right, and set a foundation to realise Australia’s ambition to be a ‘green energy superpower’. 

So what steps are needed for continued momentum? Firstly, we need to make the best use of the Hydrogen Headstart Program. While the details of the program are yet to be developed, we know it will encompass support for a small number of flagship projects. These flagship projects are paving the way for us all - they must be successful in order to give customers assurance of Australia’s commitment to this new industry. 

So what should constitute a “flagship” project?

From bp’s perspective, there are some fundamental requirements. 

  • It’s executing projects on time and at cost.
  • It’s about delivering a project to meet the needs of customers today, with the ability to scale up for the needs of tomorrow.
  • It’s about projects located near current hard-to-abate industries, as well as the industries of the future, such as critical minerals and green steel.


bp’s global insights have also taught us that ‘how’ this is done is the critical part of the recipe. Beyond executing projects well and safely….

  • It’s creating and nurturing local supply chains,
  • It’s fostering talent - whether it’s developing young Australians starting out in their career or experienced workers transitioning from other industries,
  • It’s having meaningful consultation, that is - free prior and informed consent, with Traditional Owners at every step of the journey,
  • It’s recognising that in addition to decarbonisation, broader environmental considerations are important – water usage, biodiversity, and how a project underpins sustainable livelihoods; and
  • It’s doing more than cooperating – it’s collaborating. Actively working with suppliers, governments, key trading partners and local industries to deliver brand new end to end supply chains that don’t exist today.

Support of flagship projects should be seen as an important bridge to close the commercial gap and catalyse a nascent industry.

As such – the last and most critical requirement should be for projects to demonstrate long-term commerciality without government support. They should be able to play to Australia’s strengths in abundant renewable energy combined with sound project execution and strong customer offtake.

At bp, we also recognise that the seeding of a viable Australian hydrogen industry requires more than short term government support.

  • It requires policy reform – both federally and across the states – to incentivise significant investment in renewable power generation that can be delivered at competitive prices. 
  • It requires prioritising the infrastructure we’ll need to make these projects work – be it transmission, ports, roads, water, housing – all the while looking for regional synergies with other government priorities.
  • It requires developing safety and technical settings – efficiently adopting the work other markets have undertaken - and harmonizing Australia to establishing global norms.
  • It requires approvals processes to quickly execute projects, without compromising on best-practice environmental and sustainability standards.
  • It requires hydrogen certification standards.
  • And it requires further fostering of government to government links – especially with Germany, Japan and South Korea – to enable developments on a project-by-project basis with trading partners looking for supply later in this decade.

Building such a transformative new industry is a huge challenge that will take new approaches to bring it to reality at the pace that’s needed. The Australian Hydrogen Industry will gain a reputation based on how we collectively deliver. 

The ambitions for net zero are an enormous challenge for Australia and the world, it requires an energy transition of the size, scale and nature we’ve never seen - far greater than what our forebears witnessed in the industrial revolution. To date the world has only seen energy additions which are much easier to achieve than an energy transition.

Australia is going to have to play a very big role if the world is going to meet the Paris Climate Commitments and a large and competitive Australian hydrogen industry will be key.

At bp we’re ready to embrace it and play our part. We are working very hard - using all of the global skills we have at our disposal to bring 3 significant Australian hydrogen projects into reality – to contribute to creating a new industry that can be a source of national pride for not just decades but centuries to come.